Market recap for 14 January 2021

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Nifty50: 14,595 ▲30 (0.2%)

 Sensex: 49,584 ▲91 (+0.1%)


After a dismal start, the markets picked up and closed in the green. Of the Nifty50 stocks, 26 saw gains today.  

Among the sectoral indices, the so-called defensives Nifty Pharma (+0.8%) and Nifty FMCG (+0.7%) were the top gainers, whereas Nifty Metal (-1.0%) and Nifty Media (-0.2%) receded the most.

Top gainers Today's change
UPL ▲ 3.7%
BPCL ▲ 3.1%
IndusInd ▲ 3.0%

 

Top losers Today's change
HCL ▼ 2.3%
Grasim ▼ 1.7%
JSW Steel ▼ 1.6%

Here are the top stories of the day.

JK Tyre zips ahead on subsidiary's performance

  • Shares of the tyre maker were up 6.6% today, coupled with a spike in volumes after its subsidiary Cavendish Industries witnessed a record 30% YoY jump in Q3 sales to ₹788 crore. Further, its EBITDA rose 128% YoY to ₹157 crore. 
  • Cavendish, which makes tyres for trucks, LCVs and tractors, was acquired in 2016. It contributes nearly 25% of JK Tyre’s total revenues (as of FY20). JK Tyre holds an 86% stake in Cavendish.

 

L&T strengthens on steady order flow

  • During Q3, shares of the engineering and construction giant gained 43% on the back of steady order flow across its business segments. 
  • In the last two days, the company has announced receipt of orders in the range of ₹1,000–2,500 crore for a variety of projects spanning commercial and residential buildings, transportation infrastructure, metallurgical plants, and power transmission and distribution. Its shares were up 1.8% today. 

 

Japanese Nikkei hits record highs

  • Today, Japan’s benchmark index Nikkei hit its highest level in the last 30 years. It rose 0.8% supported by a rally in technology shares and better-than-expected core machinery orders. These orders grew 1.5% over the past month, indicating a pick-up in the economy. 
  • The Nikkei last peaked in 1990 and has declined for nearly two decades thereafter. It started rising after 2012 and has since delivered positive returns in all the years, except 2018.  

 

Gold prices on the decline

  • Gold prices have been falling since last week as a stronger US dollar puts pressure on the yellow metal. Gold and silver prices in India declined by over 1% today. 
  • The US government is expected to announce a stimulus package worth $2 trillion, which could result in higher inflation. This can lead to volatility in the price of gold which is purchased as a hedge against inflation.

 

Closing bell

The markets are consolidating and showing signs of fatigue after having risen steadily since 22 December. Today, a look at the performance of sectoral indices indicates that the recent fast-runners such as metals, IT and banks have taken a breather. Meanwhile, defensive segments such as FMCG and pharma have started seeing renewed investor interest. Globally, all eyes will be on President-elect Joe Biden’s plan for fresh government spending to aid economic recovery.


Good to know

What is an OFS?

An offer for sale (OFS) is a method for promoters or major investors to reduce their stake in a company. Only promoters or shareholders holding more than 10% of the share capital in a company can issue an OFS. Often, IPOs also include an OFS component in addition to a fresh issue.


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Disclosures and Disclaimer

Investment in securities markets are subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.

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